$50M in criminal check cashing schemes alleged

The Justice Department said Thursday that four check cashing businesses on the East and West coasts have been charged with engaging in money laundering schemes worth more than $50 million.

Under the Bank Secrecy Act, check cashers and other financial institutions are required to report to the Treasury Department any transaction of more than $10,000 in currency. Indictments in the separate investigations allege that the defendants filed false currency transaction reports or didn't file them at all.

Two indictments charging three people and two check cashing businesses were returned in Los Angeles. Two indictments charging four people and a pair of check cashing businesses in Philadelphia and Flushing, N.Y., were returned in New York City. All seven defendants were arrested or surrendered to authorities Thursday.

For the past six years, one of the businesses in Los Angeles allegedly handled 800 transactions each in excess of $10,000 and paid out more than $20 million in cash without ever filing a report with the Treasury Department.

Unscrupulous check cashers "think that they are flying under the radar, but they are not," said Lanny Breuer, the Justice Department's criminal division chief. "We will not tolerate check cashing businesses evading anti-money laundering laws."

Such businesses enable people to cash checks without having to go to a bank or maintain a bank account. A check casher typically will charge a fee for this service.

Using check cashers to launder money is prevalent in health care fraud cases. Businesses convert proceeds of their ill-gotten gains to cash by presenting checks to check cashers who will not ask for proof of a customer's identity and will file false reports or not file reports at all.